•2:01 PM
The stated views of taxation between the two main parties are very different. The Democrat Party favors a progressive tax system. Here is the text from their party platform:
"First, we must restore our values to our tax code. We want a tax code that rewards work and creates wealth for more people, not a tax code that hoards wealth for those who already have it. With the middle class under assault like never before, we simply cannot afford the massive Bush tax cuts for the very wealthiest. We should set taxes for families making more than $200,000 a year at the same level as in the late 1990s, a period of great prosperity when the wealthiest Americans thrived without special treatment. We will cut taxes for 98 percent of Americans and help families meet the economic challenges of their everyday lives. And we will oppose tax increases on middle class families, including those living abroad."
On the other side of the isle, the Republican Party platform states:
"The fundamental premise of tax relief is that everyone who pays income taxes should see their income taxes reduced."
In my opinion, the definition of “fundamental premise” means they believe in a more conservative approach to taxation than the democrats but a progressive approach nonetheless. Their tax reforms did not eliminate our current progressive tax system – it only gave it a band-aid.
Our country was based on certain unalienable rights: life, liberty and the pursuit of happiness. Adam Smith defined the pursuit of happiness as property rights. What I earn, what I buy, and what is given to me is inherently and completely mine. I have ownership of those items. What you earn, purchase or receive as a gift is likewise yours. I have no right to take them and you have no right to take what is mine. To do otherwise would be stealing and punishable by the law.
Government operates on the exact same laws that you and I operate on. As the Declaration of Independence states, it derives “its powers from the governed.” It cannot derive powers from the governed that the governed do not of themselves possess. It is not possible – to do otherwise is tyrannical and contra the principles upon which Jefferson, Adams, Franklin and others ascribed their most sacred honor and founded this nation upon.
Because of this, taxation at the start of our nation was principally a sales tax and was declared that it ought to remain so. Below is an excerpt from Federalist #21 by Alexander Hamilton:
"It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country."
Did you catch that last sentence? Why is it then that the majority of the government's revenue comes from an income tax? I am not sure I have the answer to my question but one thing I do know, that our income tax system is immoral and free people should demand its abolition or extreme revision in favor of a flat tax.
Why is our tax code immoral and why does it require revision? Our tax code has become a tool of manipulation by the government to encourage or discourage certain behaviors, favor certain businesses and not others and to tax people at different rates based on their income. I am reminded of one of the points from the Communist Manifesto giving clarity to the beliefs of communism: “A heavy progressive or graduated income tax.”
Not that all of the principles of communism are bad or inherently wrong. However, this principle gives the government the power to take away from everyone – the rich as well as the poor, the fortuned as well as the unfortunate – and giving the government the distinct power to choose who to take more from and who to give more too. Such a principle is inherently evil and makes of the government a thief and a bully – a bully so big that everyone just accepts the fact that he will win and rather than be beat up every day at lunchtime just to have the bully take our money away we line up and say, “Here Uncle Sam – please take this. I promise this is what I owe you.”
I think people cringe in disbelief when it is proposed that the government is also capable of stealing and that our tax system is in fact just that. We would rather believe that somehow it is right for them to take our money because we have a democratic process whereby we choose our representatives. However, Our government has adopted this principle of the manifesto – knowingly or unknowingly it doesn’t really matter. What matters is that we need to do something about it.
I support legislation that would eliminate the income tax and restore the source of revenue to the one established by the founders: an indirect tax (i.e., the sales tax).
To learn more about exciting legislation that is gaining traction in congress, please visit:
http://www.fairtax.org/site/PageServer
"First, we must restore our values to our tax code. We want a tax code that rewards work and creates wealth for more people, not a tax code that hoards wealth for those who already have it. With the middle class under assault like never before, we simply cannot afford the massive Bush tax cuts for the very wealthiest. We should set taxes for families making more than $200,000 a year at the same level as in the late 1990s, a period of great prosperity when the wealthiest Americans thrived without special treatment. We will cut taxes for 98 percent of Americans and help families meet the economic challenges of their everyday lives. And we will oppose tax increases on middle class families, including those living abroad."
On the other side of the isle, the Republican Party platform states:
"The fundamental premise of tax relief is that everyone who pays income taxes should see their income taxes reduced."
In my opinion, the definition of “fundamental premise” means they believe in a more conservative approach to taxation than the democrats but a progressive approach nonetheless. Their tax reforms did not eliminate our current progressive tax system – it only gave it a band-aid.
Our country was based on certain unalienable rights: life, liberty and the pursuit of happiness. Adam Smith defined the pursuit of happiness as property rights. What I earn, what I buy, and what is given to me is inherently and completely mine. I have ownership of those items. What you earn, purchase or receive as a gift is likewise yours. I have no right to take them and you have no right to take what is mine. To do otherwise would be stealing and punishable by the law.
Government operates on the exact same laws that you and I operate on. As the Declaration of Independence states, it derives “its powers from the governed.” It cannot derive powers from the governed that the governed do not of themselves possess. It is not possible – to do otherwise is tyrannical and contra the principles upon which Jefferson, Adams, Franklin and others ascribed their most sacred honor and founded this nation upon.
Because of this, taxation at the start of our nation was principally a sales tax and was declared that it ought to remain so. Below is an excerpt from Federalist #21 by Alexander Hamilton:
"It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue. When applied to this object, the saying is as just as it is witty, that, "in political arithmetic, two and two do not always make four .'' If duties are too high, they lessen the consumption; the collection is eluded; and the product to the treasury is not so great as when they are confined within proper and moderate bounds. This forms a complete barrier against any material oppression of the citizens by taxes of this class, and is itself a natural limitation of the power of imposing them.
Impositions of this kind usually fall under the denomination of indirect taxes, and must for a long time constitute the chief part of the revenue raised in this country."
Did you catch that last sentence? Why is it then that the majority of the government's revenue comes from an income tax? I am not sure I have the answer to my question but one thing I do know, that our income tax system is immoral and free people should demand its abolition or extreme revision in favor of a flat tax.
Why is our tax code immoral and why does it require revision? Our tax code has become a tool of manipulation by the government to encourage or discourage certain behaviors, favor certain businesses and not others and to tax people at different rates based on their income. I am reminded of one of the points from the Communist Manifesto giving clarity to the beliefs of communism: “A heavy progressive or graduated income tax.”
Not that all of the principles of communism are bad or inherently wrong. However, this principle gives the government the power to take away from everyone – the rich as well as the poor, the fortuned as well as the unfortunate – and giving the government the distinct power to choose who to take more from and who to give more too. Such a principle is inherently evil and makes of the government a thief and a bully – a bully so big that everyone just accepts the fact that he will win and rather than be beat up every day at lunchtime just to have the bully take our money away we line up and say, “Here Uncle Sam – please take this. I promise this is what I owe you.”
I think people cringe in disbelief when it is proposed that the government is also capable of stealing and that our tax system is in fact just that. We would rather believe that somehow it is right for them to take our money because we have a democratic process whereby we choose our representatives. However, Our government has adopted this principle of the manifesto – knowingly or unknowingly it doesn’t really matter. What matters is that we need to do something about it.
I support legislation that would eliminate the income tax and restore the source of revenue to the one established by the founders: an indirect tax (i.e., the sales tax).
To learn more about exciting legislation that is gaining traction in congress, please visit:
http://www.fairtax.org/site/PageServer
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7 comments:
I don't know much about taxes, and I do think it would be nice to be taxed solely on purchases, (it might promote a little independence by way of gardening and sewing), but only if there was a system that kept everyone honest. We are already charged 6.5%-8% sales tax, can you imagine the cost of milk, if we were to support our government with sales tax? The wealthy would still get away with tax evasion because they could "pay under the table" for big ticket items, to people who don't earn as much from making the product as the government would from taxing it. Even on a smaller scale, say the price of milk, what if people decided to stop going to the store to buy milk, and bought it from the farmer direct, "under the table?" I believe the countries infrastructure would fall apart.
So my question is how would you audit individuals?
P.S. I think the biggest problem with taxes is we don't spend them wisely. There are so many little things (lunch meetings, multiple cell phones per individual, office supplies gone astray) that to keep track of them would require a commission all in itself!
*country's
Dear Reader,
Thank you for commenting on my post. Here is the answer to your question from the Fair Tax website:
"The FairTax simplifies tax compliance, thereby reducing tax evasion.
Several factors bear upon compliance – both fraud and non-fraud – from the scholarly research.
The most important are the number of taxpayers, marginal tax rates, the complexity of the system, the number of decisional junctures (opportunities for each taxpayer), transparency or the risk of detection, the magnitude of punishment if caught, non-financial motivation to cheat
(including perceptions of unfairness), and enforcement resources and safeguards in place.
Research reported above shows that the FairTax dramatically lowers marginal tax rates.
Lower rates, all other things being equal, imply lower evasion because the benefits from evasion
decline while the costs of evasion remain comparable. However, precisely because of the larger
base and lower marginal tax rates, the benefit from lawful tax avoidance or illegal tax evasion
under the FairTax is much less at the margin relative to either the current system or competing
alternative tax systems that have higher marginal tax rates.
Virtually any sales tax would reduce the number of points of collection (and enforcement) dramatically; the FairTax reduces them by about 80 percent (145 million to 25 million) because individuals no longer have to file annual returns. The Government
Accountability Office, among others, has specifically identified the negative relationship between compliance costs and the number of focal points for collection. Virtually any sales tax would concentrate the lion’s share of revenue collection to fewer than ten percent of retailers, further simplifying collection and enforcement. Any sales tax would reduce form and filing complexity from today’s Rube Goldberg contraption to a simple sales tax return, largely completed by point-of-purchase software.
Perception of the fairness of the tax system is increasingly regarded as an important consideration. Studies have persuasively shown that attitudes are important determinants of compliance. Under the FairTax, as the costs of compliance shrink and the perceived fairness of the tax system increases, some of the hostility to the tax system will decline."
In addition, I am certain, as are you, that there will be some tax evasion; there always has been and - until we live in more principled world - there probably always will be some amount of tax evasion. However, there are currently tens of millions who do not pay their income tax now. It is my belief that the Fair Tax would reduce the number of people who don't pay their taxes and will do it in a way consistent with the constitution.
I feel that the number one problem with taxation is the current form of taxation but I certainly agree with you that the second biggest problem is the way they are spent. As more Americans become vested in the way taxes are spent (by 100% of the country paying taxes), more Americans will voice their opinions about the proper role of government and taxation at large.
Thank you again for your post - please feel free to post again.
Dear Reader,
One more thought I had regarding auditing individuals...
The current system requires the government to audit individuals. There are so many places where people receive "income" as defined by the IRS and so many deductions created by our elected officials to encourage or discourage spending on this or that, that you actually have to audit the income taxes to see if the individual did them right and were honest in their reporting.
In a fair tax world, the only place to really be dishonest is in who you purchase from. If the person you are purchasing from deals under the table, then there is a problem.
It is my belief that most Americans are good and principled and would not do this. There are those that would but the place to audit wouldn't necessarily be the individuals, but the sellers. Businesses would continue to be regulated and audited by the government in a need to ensure they were collecting the proper amount of tax rather than looking in the files of every single working American to see if they told the truth. In my opinion, this is a government much more of and for the people.
All the best - Ken
That is very interesting, I didn't even imagine all those benefits. I haven't looked at your blog since I posted my first two comments, so I cannot remember if you mentioned this, but how would we start on this road to the fair tax? What can we do as individuals?
The way we can start on the road to the fairtax is first by being educated about it and then second by persuading our elected officals in Congress to become supporters or even co-sponsers of the legislation. You can also sign up for e-mail alerts and contribute to the movement on the www.fairtax.org website.
I believe this is an essential step to return our government to sound principles of Liberty. It is not the end we should all desire but it is an essential step to our getting there. Our current system is not only broken, but it is contra the principles of Liberty and our constitution.
I hope you will return from time to time and comment on other posts. I have appreciated the chance for the dialogue.
Ken
I think you are right on the mark with this. The current system was developed by wealthy politicians to favor the wealthy. It is amazing to see how far tax policy has strayed from its beginnings. It happened little by little as Americans became acclimated to the change, just like every other harmful policy and practice to which our government subscribes. Demanding a change in tax policy would be an excellent way to wake them up and take our government back.